Verizon to pay $1 million over deceptive “unlimited” EVDO plans

The New York Attorney General says that Verizon was guilty of deceptive …

The case of the limited "unlimited" EVDO has been settled: Verizon has agreed to pay out $1 million to customers that it has terminated for overuse of its high-speed data service. New York Attorney General Andrew Cuomo made the announcement today, saying that Verizon's decision came after a nine-month investigation into the company's services and marketing practices. The attorney general accused Verizon of producing misleading materials and deceptive marketing when it claimed that its data plans were unlimited.

The issue came to light last year, when some customers found their accounts on the chopping block after downloading too much data over Verizon's wireless broadband service. The wireless provider prominently advertised its EVDO service as "unlimited," but the fine print indicated that it was only unlimited for certain things, such as e-mail and web access. Video, music, and other media did not fall into that category, and Verizon began enforcing an undisclosed bandwidth cap on users that the company decided downloaded too much.

Verizon eventually cut off some 13,000 customers for excessive use of its "unlimited" service, leaving those customers out in the cold with equipment that they could no longer use. But the Attorney General said that the service's limitations were not clearly and conspicuously disclosed, and that they "directly contradicted the promise of 'unlimited' service."

Verizon, which has voluntarily cooperated with the investigation since it began in April, has now agreed to reimburse the terminated customers for the costs associated with their now-useless equipment. Verizon estimates that it will come out to be about $1 million, with an additional $150,000 in fines paid out to the state of New York.

"This settlement sends a message to companies large and small answering the growing consumer demand for wireless services. When consumers are promised an 'unlimited' service, they do not expect the promise to be broken by hidden limitations," said Cuomo in a statement. "Consumers must be treated fairly and honestly. Delivering a product is simply not enough—the promises must be delivered as well."

The company has also agreed to revise its marketing of the wireless plans, in addition to allowing common uses of the broadband connection (such as video downloads). As you can see above, Verizon has already updated some of its marketing material.